Grain and livestock producers with a cash advance from 2018 will have until September to pay back their loan.
“Hopefully, this will give them enough time to get it paid down so that we’re not forcing them into a default situation,” said Rick White, president and CEO of the Canadian Canola Growers Association, one of the largest administrators of the Advance Payments Program.
Originally, cash advances from the 2018 edition of the program was supposed to paid back Sept. 30 but that deadline was extended last summer to March 31.
“We could see there was a problem with all the market disruptions and the harvest delays, so we asked the (federal ag) minister for a stay of default of six months,” White said March 24.
“Fast forward to now, things really haven’t gotten much better — and in fact, they’ve probably gotten a whole lot worse. So here we are, very close to a deadline, seeing that we still had quite a few farmers that hadn’t done anything with their 2018 advance.”
And those numbers were “significant,” he added.
The canola growers’s association administers about 98 per cent of the cash advances in Western Canada, and as of last week, about 1,600 farmers had outstanding balances from 2018 to the tune of $136 million.
“Under the circumstances, the last thing we wanted to do is add more stress on farmers’ lives by backing them into a deadline,” said White, adding a farmer in default can’t get a new cash advance until the old debt has been cleared.
The new six-month extension on the current stay of default applies to both crops (grains, oilseeds, and pulses) as well as livestock (cattle and bision) as the latter’s 24-month payment period comes to an end at the end of March as well. The extension is automatic, so farmers with outstanding 2018 cash advances won’t need to apply, though they will have to pay back the advance as usual upon delivery of any grain or livestock.
And while the 2019 program year is wrapping up, with no further changes announced as of yet, the 2020 program is starting to ramp up.
White said his organization is pre-screening applications for the 2020 program and will be in a position to start issuing money on April 1 — though there may be some processing delays.
“Farmers should know that we are working remotely and their patience in advance is appreciated,” he said. “Farmers can apply like they always have — all our channels are still open — but our staff are working remotely and there will be some efficiency drag due to that.
“It may take a little longer to get your cheque or to reach us on the phone, but we’re going to do our absolute very best to make sure we get those cheques out and processed as quickly as we can.”
For 2020, the maximum advance is $1 million, with up to $100,000 of that interest-free — a change from last year’s increase to $500,000 on the interest-free portion of the advance for canola growers.
Both the Canadian Canola Growers Association and Alberta Wheat are dropping their admin fee and reducing the interest rate (to prime less 0.75 per cent).
There about three dozen organizations administering the Advance Payment Program. For a list of administrators and program info, go to canada.ca and search for ‘advance payments program.’